Correlation Between JPMorgan BetaBuilders and SPDR SP

Can any of the company-specific risk be diversified away by investing in both JPMorgan BetaBuilders and SPDR SP at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining JPMorgan BetaBuilders and SPDR SP into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between JPMorgan BetaBuilders Aggregate and SPDR SP 400, you can compare the effects of market volatilities on JPMorgan BetaBuilders and SPDR SP and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in JPMorgan BetaBuilders with a short position of SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan BetaBuilders and SPDR SP.

Diversification Opportunities for JPMorgan BetaBuilders and SPDR SP

0.58

Correlation Coefficient

JPMorgan BetaBuilders  SPDR SP

Very weak diversification

The 3 months correlation between JPMorgan and SPDR is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan BetaBuilders Aggregat and SPDR SP 400 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP 400 and JPMorgan BetaBuilders is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on JPMorgan BetaBuilders Aggregate are associated (or correlated) with SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP 400 has no effect on the direction of JPMorgan BetaBuilders i.e., JPMorgan BetaBuilders and SPDR SP go up and down completely randomly.

Pair Corralation between JPMorgan BetaBuilders and SPDR SP

Given the investment horizon of 90 days JPMorgan BetaBuilders is expected to generate 3.55 times less return on investment than SPDR SP. But when comparing it to its historical volatility, JPMorgan BetaBuilders Aggregate is 3.69 times less risky than SPDR SP. It trades about 0.12 of its potential returns per unit of risk. SPDR SP 400 is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  7,446  in SPDR SP 400 on May 7, 2025 and sell it today you would earn a total of  532.00  from holding SPDR SP 400 or generate 7.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

JPMorgan BetaBuilders Aggregat  vs.  SPDR SP 400

JPMorgan BetaBuilders

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan BetaBuilders Aggregate are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, JPMorgan BetaBuilders is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

SPDR SP 400

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR SP 400 are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, SPDR SP may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with JPMorgan BetaBuilders and SPDR SP

The main advantage of trading using opposite JPMorgan BetaBuilders and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan BetaBuilders position performs unexpectedly, SPDR SP can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in SPDR SP will offset losses from the drop in SPDR SP's long position.

The idea behind JPMorgan BetaBuilders Aggregate and SPDR SP 400 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.